Genius may have its limitations, but stupidity is not thus handicapped.
Elbert Hubbard
Re-examined situation in US and Europe.
Still of the conclusion that the US will raise debt ceiling, but will play chicken to the last possible second, while Europe will dilly-dally in regard to Greece (seriously, why wait all the way until Thursday to meet?) and then come up with some half-baked scheme to socialize debt haircuts amongst private investors that the markets will definitely not like and will amount to a Greek default.
In light of that I am long gold again with a small position and looking for a buying opportunity over the next day from a CHANGE downward thanks to some short-lived HOPE.
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Did a quick overnight long gold trade on the $5 dip, just entered into EUR:USD short at these levels (1.4175 area). Profit target at 1.4075
Adding to EUR:USD short at $1.4205
US seems to be moving closer to debt ceiling agreement as I expected.
Now for the other shoe to drop on Greece.
Gold pulled back $12 on news of the progress in the US on the debt ceiling. I will have to examine if this is the appropriate entry point for gold long, as most of my powder is committed to the EUR:USD short.
Close EUR:USD short at 1.4140 for a 50 pip profit. Need to re-evaluate competing factors tonight for next move.
Thesis still holds, US raises debt ceiling by around $2 trillion with some planned spending cuts I'm thinking near the $1.6 trillion range with tax revenue increases from loophole closures and certain tax credit subsidy eliminations near $400 billion.
I wonder if they will reduce the tax on overseas earnings that are repatriated, it would make sense to drop them to some nominal amount, maybe 10%, the repatriation would act as a stimulus plus would generate tax revenue, otherwise companies will hold them overseas forever.
I'm more certain than ever that Greece is going to at least selectively default, probably through forced maturity extension of existing debt.
Bought Gold Aug Future 1588, target 1595.
Revising gold long target to $1600 as I firmly believe the European finance meeting tomorrow will not have any grand result or action that the market seems to be predicting, but rather will be more group hugs and meaningless resolutions, and the market will be sorely disappointed, with gold benefiting from the disappointment.
Market has risk on hat, EU meeting is on Thursday morning (tomorrow). Sold gold long for $0.50 profit.
Will re-enter on any added weakness today.
For a day trade, long WTI Sep to $100
Looking to enter around $96.50 for the day trade long CL Sep.
Long CL Sep from $97.95
Sold CL Sep for $0.50 gain.
Long CL again from $98.42
Sell at $100
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